from the United States District Court for the Northern
District of Florida D.C. Docket No. 4:15-cr-00010-RH-CAS-1
WILSON and JILL PRYOR, Circuit Judges, and BARTLE, [*] District Judge.
BARTLE, District Judge:
the appeal of Dr. James S. Doran who was convicted under 18
U.S.C. § 666 of embezzlement from Florida State
University ("FSU"), an organization receiving
federal funds. He argues that he
is entitled to a judgment of acquittal. Doran maintains,
among other grounds, that any embezzlement was not from FSU
and that the Government did not prove that the victimized
organization under the statute was a recipient of federal
benefits. The Court has jurisdiction of this appeal pursuant
to 28 U.S.C. § 1291. The Court's review of the
District Court's denial of a judgment of acquittal is
de novo. See United States v. Yates, 438
F.3d 1307, 1311-12 (11th Cir. 2006) (en banc).
Section 666 provides in relevant part:
(a) Whoever, if the circumstances described in subsection (b)
of this section exists --
(1) being an agent of an organization, or of a State, local,
or Indian tribal government, or any agency thereof --
(A) embezzles, steals, obtains by fraud, or otherwise without
authority knowingly converts to the use of any person other
than the rightful owner or intentionally misapplies, property
(i) is valued at $5, 000 or more, and
(ii) is owned by, or is under the care, custody, or control
of such organization, government, or agency;
. . .
shall be fined under this title, imprisoned not more than 10
years, or both.
(b) The circumstance referred to in subsection (a) of this
section is that the organization, government, or agency
receives, in any one year period, benefits in excess of $10,
000 under a Federal program involving a grant, contract,
subsidy, loan, guarantee, insurance, or other form of Federal
(c) This section does not apply to bona fide salary, wages,
fees, or other compensation paid, or expenses paid or
reimbursed, in the usual course of business.
See § 666.
to the facts related to the embezzlement which we view in the
light most favorable to the Government, the verdict winner.
See United States v. McLean, 802 F.3d 1228,
1233 (11th Cir. 2015). Doran was a professor in the College
of Business of FSU. He was also a director and officer of the
Student Investment Fund ("SIF"), a non-profit
corporation established by FSU for charitable and educational
purposes, and had signatory authority over the SIF's bank
2010, Doran transferred $300, 000 of the SIF funds to his own
personal account. In anticipation of an audit of the SIF, he
returned the money a few months later. In 2011, he again
moved money, this time $350, 000, from the SIF to his
personal account. After the SIF board members discovered this
transfer, he repaid the amount in full. In 2010, he had also
written a SIF check for $10, 000 to cover an audit of his
personal account. Only as a result of an investigation and
after he was confronted in 2012 did he repay the $10, 000 to
was established by FSU under Florida law in 2009. The
objective of the SIF, as characterized in a FSU College of
Business document, was to "enrich student education
through active participation in financial markets. Students
assist in stock selection and management of a real
portfolio." The SIF began with approximately $300, 000
donated by private sources. The FSU Foundation later added
$1, 000, 000. The Foundation's funds came from private
donors and not from FSU.
SIF's Board of Directors consisted of seven directors.
They included the Chair of the FSU Board of Trustees, the FSU
President, and the FSU Vice President for Finance and
Administration or their designees, as well as the Dean of the
FSU College of Business, two FSU College of Business faculty
members, and a member selected by the FSU President
"with significant and substantial investment experience
and expertise." The SIF maintained its own bank account,
filed its own tax forms, and paid for its own audits. It
funneled no money to FSU, and FSU funneled no money to it.
Under its Articles of Incorporation, the SIF had no power
"to convey, lease, pledge, or otherwise encumber assets
of the State of Florida" and "The Florida State
University Board of Trustees and The Florida State University
assume[d] no financial liability for the [SIF]."
the evidence established that Doran had embezzled funds from
the SIF, the indictment made no mention of the SIF. Rather,
the indictment's one count charged that Doran had
embezzled or stolen property of FSU, which it described as
the recipient of federal benefits.
argues that his conviction must be overturned because the SIF
was the victimized organization under § 666 but received
no federal benefits. In Doran's view, the SIF and FSU are
separate entities. The Government concedes the point that the
SIF was not the recipient of any federal funds. Nonetheless
it counters that the embezzlement by Doran comes within the
ambit of § 666 because the SIF was closely affiliated
with FSU which did receive millions of federal dollars and
that Doran, an FSU professor, was acting as an agent of FSU
when he committed the crime in issue.
sustain a conviction under § 666, the Government must
prove among other elements that the organization which was
victimized received federal benefits in excess of $10, 000.
The relevant organization under the statute is the SIF since
it was the organization that was the subject of the
embezzlement. The Government is mistaken in focusing on FSU
as the victimized organization and in conflating FSU and the
SIF. Despite the affiliation of FSU and the SIF, there is
simply no evidence in the record that FSU and the SIF are
alter egos so as to allow the Court to pierce the SIF's
corporate veil and to treat FSU and the SIF as one and the
same. See Molinos Valle Del Cibao v. Lama, C. por
A., 633 F.3d 1330, 1349-51 (11th Cir. 2011); Dania
Jai-Alai Palace, Inc. v. Sykes, 450 So.2d 1114, 1116
Court's decision in McLean is dispositive.
There, the defendant, David McLean, was charged under §
666 with accepting bribes in return for helping to obtain for
the provider of the bribe a construction grant from the
Margate Community Redevelopment Agency ("MCRA").
See McLean, 802 F.3d at 1231. McLean was a
commissioner for the City of Margate as well as a board
member of the MCRA. The members of the City Commission and
the MCRA Board were the same. While the MCRA was a separate
legal entity, "the City was financially accountable for
the MCRA and the MCRA is part of the government's
operations." See id. at 1241.
City received federal funds directly from the federal
government, but the MCRA did not. The City, however,
transferred some of its federal funds to the MCRA. For an
organization such as the MCRA to be deemed the recipient of
federal benefits under § 666, the Government must prove
that the federal program had "a sufficiently
comprehensive 'structure, operation, and
purpose'" and a relationship with "the ultimate
use of [the program's] funds at the local level."
See id. at 1243-44 (quoting United States v.
Edgar, 304 F.3d 1320, 1325 (11th Cir. 2002));
Fischer v. United States, 529 U.S. 667, 681, 120
S.Ct. 1780, 1788 (2000). This Court affirmed the District
Court's entry of a judgment of acquittal on the ground
that there was insufficient evidence that the MCRA had
received a federal benefit as defined in Fischer and
Edgar. See McLean, 802 F.3d at 1244.
identified the MCRA as the relevant local organization under
§ 666 and not the City. It was the MCRA and not the City
which was connected to the bribe at issue. Likewise, here it
was the SIF and not FSU that was the target of the
embezzlement. In McLean, where the governing board
of the City and the MCRA were the same, the City and the MCRA
had an even closer relationship than had FSU and the SIF.
Yet, this Court did not conflate the City and the MCRA. The
two affiliated entities in McLean were not alter
egos and the two affiliated entities here were not alter
egos. Moreover, the Court in McLean did not consider
significant in its analysis the federal funds retained by the
City for its own use. While in McLean the MCRA
received some federal funds indirectly, the SIF, it must be
emphasized, received no federal funding, directly or
indirectly. Thus, there were no federal funds "owned by,
or [ ] under the care, custody, or control of" the SIF.
See § 666(a)(1)(A)(ii).
Government also argues that Doran's conviction should be
upheld because he was an agent of FSU. This argument fails.
Again, we reference McLean. In that case, this Court
did not deem defendant McLean's role as one of the
City's commissioners to be relevant under § 666.
With respect to charges under § 666, McLean was simply
acting as an agent of the MCRA even though City funds had
been transferred to the MCRA. In this case, Doran was a
director and officer and thus an agent of the SIF. His
employment as a professor at FSU was irrelevant inasmuch as
he did not embezzle any FSU funds. Thus, any agency
relationship he had with FSU is of no moment.
acknowledge that § 666 is "expansive." See
Fischer, 529 U.S. at 678. Yet, its net cannot be cast so
widely as to encompass the wrongdoing that occurred here, for
the Government has not demonstrated any federal interest. The
Supreme Court cautioned that not "all recipient
fraud" is covered under § 666. See id. at
681. As it explained, the meaning of the term
"benefits" in the statute should not be interpreted
as "limitless." See id. "Doing so
would turn almost every act of fraud or bribery into a
federal offense, upsetting the proper federal balance."
has raised a number of additional grounds for reversal. For
example, he questions whether the Government has proven that
the federal funds FSU received were part of any program with
a sufficiently comprehensive structure, operation, or purpose
to meet the requirement under § 666(b) as a federal